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dollar scam. in today's cover story, partnerships are giving a boost to startup companies. plus, why one trader says boring is good when it comes to investing. a documentary takes us behind the scenes of a gm factory closure. and a trader's impression on alcoa's earnings. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.
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good morning. it's wednesday, october 10th. i'm angela miles. in today's first look: earnings from alcoa and yum brands. first up alcoa. the aluminum company posted a loss, but still managed to top expectations. alcoa lowered its growth forcast to 6% from 7%. the company has $1.4 billion cash on hand. apparently there's a lot of money in chicken and tacos. yum brands, which owns kfc and taco bell, reported stronger-than- expected earings and raised its full-year guidance. meanwhile, tuesday was a down day on wall street. stocks and gold sold off on global economic concerns, while oil rallied. nhl talks could resume today between players and owners. the commissioner says major money issues are not on the agenda. and the cfo of best buy is leaving the company after 10 years on the job. todd horwitz of the adam mesh group joins us now, and we are off and running with earnings.
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alcoa reported in last night. are you impressed in any way with the earnings of alcoa? > > good morning. no, i am not really impressed. alcoa, although the earnings beat, is really a broken-down company. if you go back and look at a five-year chart, you'll see that it's never truly recovered from its overall high of 40, and it's really stuck down here in a range in my opinion. it's really untradeable stock. it's nice that they beat, but i don't think it really means anything for the stock. maybe it will be a little bit of an inspiration for the overall market. > > what about the overall market? the market has been so strong, and now reports are coming out tuesday it's time to bear down. the bears are coming. what do you think? > > the bears could be coming. tuesday's volume was very light, so that's an issue. we go, "well, the sell-off was on very light volume." but what you want to really look at is the nasdaq and the russell have both been underperforming the dow and the s&p for the last couple of weeks. that is a bearish signal. are we going down from here? my guess is that we could be getting into that area.
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however, if we don't break through 1420 on the s&p, we're not going down. right now we're really range-bound. if you look at a chart over the last three weeks, we're really range-bound between 1420 and 1475. until one of those levels gets violated, there's no reason to think we're going anywhere, but nowhere is where we're going right now. > > are you seeing any buy signals out there? > > i'm not really seeing any buy signals. i think we're waiting a lot to see what happens with the overall market, we're waiting to see if there's any world events, we're waiting to see what's happening in china, we're waiting to see the rest of earnings season. so i don't see any buy signals, but i'm not seeing any sell signals either. the tape itself is still indicating that the market is still fairly bullish here. > > that's todd horwitz of the adam mesh group. thank you. have a good day. > > thank you so much. greek citizens neglected to roll out the welcome mat for german chancellor angela merkel. yesterday, merkel was greeted by thousands of protestors in athens. it was the politician's first visit to the country since the euro crisis began. many greek citizens attribute strong austerity measures to the german chancellor, who yesterday pledged her support for greece while also reiterating the need for serious cuts. jack ewing, reporter with the interantional herald tribune, tells first business that the most pressing issue for greece and eu leaders right now is getting another bailout for the cash-strapped nation. "aside from the protests, the
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more substansial question is how are they going to reach an agreement that will allow greece to get some more aid and avoid running out of money. it's pretty tight, there are very difficult negotiations going on with the creditors, the eu and the imf. that's really, aside from the protests, the most important problem that needs to be solved right now." without another bailout, greece says it will run out of money by the end of next month. gas prices in california edge up another penny or more around the state. tuesday's average for a gallon of unleaded reached $4.67. that's a state record, and the highest in the nation. analysts blame the spike on refinery disruptions and corrison in critical pipelines. senator barbara boxer is asking the justice department to look into whether refinery maintenance issues are being used as an excuse to drive up the price. honda is seizing the opportunity by offering $3,000 fuel debit cars with the purchase of its 2012 honda civic. the car runs on natural gas. the trick is finding pumps
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that offer natural gas. a political feud between china and japan is weighing on automakers. a drop in demand from china has affected production at toyota, honda and mazda in japan. all three automakers reported demand was down between 35 to 49 percent from the year before. china and japan have been locked in a territorial dispute since last month regarding a chain of islands between the two countries. since then, trade between china and japan has slowed. more than 500 people are charged with scamming homeowners in bad mortgage deals. u.s. attorney general eric holder told reporters yesterday many of the scams involved unnecessary fees and were aimed at innocent homeowners attempting to participate in foreclosure relief programs created by the obama administration. holder says several government agencies coordinated efforts to
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track down con artists. "over the past 12 months it has enabled the justice department and its partners to file 285 federal criminal indictments and informations against 530 defendants for allegedly victimizing more than 73,000 american homeowners and inflicting loses in excess of one billion dollars." meanwhile, a u.s. attorney in new york has filed a civil lawsuit against wells fargo. the bank is accused of bilking consumers out of millions of dollars in mortgage fraud. wells denies allegations. meetings resume today for 8 u.s. senators aiming to avoid the year-end fiscal cliff. the bipartisan group continues a second day of meetings that will stretch into tomorrow. the goal is for democrats and republicans to reach an agreement on how to avoid the looming spending cuts that go into effect january 1st. after a blueprint is drawn up, congress will need to vote to pass the law. senators are meeting this week, although lawmakers have noted that the outcome of the
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election will impact their plan. stanley black and decker is re- tooling. the company is selling its hardware and home- improvement business to spectrum brands holdings for $1.4 billion in cash. stanley black and decker makes locks, faucets and hardware for residential use. reports say the acquistion will broaden spectrum brands' line, which includes remington and toastmaster. drugmaker eli lilly is one step closer to a new drug to treat alzheimer's disease. eli lilly's experimental alzheimer's medication, solanezumab, reduced memory decline by 34% in patients with mild alzheimer's disease, according to a study. that may grant approval from the u.s. food and drug administration. doctors say the results are encouraging but not enough to win approval without more studies that confirm the benefits. eli lilly shares were up over a dollar at nearly $52 at tuesday's close. in the latest ranking of popular brand names, usa today and intrabrand report coca-cola
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still reigns as the most valuable brand in the world. apple is a close second. its brand worth is up 129% and it may top coke next year. brand values for amazon, samsung and oracle have grown 20% since last year. automakers are up 12%, while goldman sachs lost 16% and blackberry dropped by 40%. walmart stores are stepping up sales efforts and getting into same-day delivery. walmart is testing its "walmart to go" services to compete with amazon, which recently launched a same-day delivery service. the store plans to deliver same-day service for toys, televisions, and any online merchandise, just in time for the holidays. meanwhile, over at sears, sears hometown will reportedly start trading on the nasdaq on friday. it is a spinoff of sears holdings. the retailer is splitting off companies in an effort to boost its profits. some corporations are putting the brakes on business travel. a survey by the global business travel association finds
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companies are holding back on travel due to uncertainty in the economy as well as waiting out the upcoming election. business travel is projected to grow 2.6% in 2012, which is still better than the 2.2% orginally expected. however, in 2013, travel spending could tick up to 4.9%. groundless. that is what china's commerce ministry calls accusations from the u.s. yesterday that equipment from two chinese telecomm companies could be used for spying in the u.s. the house intelligence committee accused huawei technologies and zte corporation after a year-long study, concluding that the two companies pose a threat to u.s. national security. both companies deny the allegations, huawei saying the findings are politically-motivated. cracker barrel is playing defense. the restaurant chain is defending its newly appointed
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chairman, james bradford. earlier this week the chain's owner, biglari holdings, said bradford had lied on his resume. cracker barrel claims there was a misunderstanding. apple prices are climbing far from the tree. at the retail level, apple prices are on the rise. it's due to fluctuating temperatures that hit the crop last spring and killed apple blossoms across the nation. this will reportedly cause prices to rise by as much as a dollar a pound. the price of apple juice could rise by as much as 20%. former ge ceo jack welch is out at fortune magazine according to reports. last week, welch questioned the drop in the unemployment rate to 7.8%. he famously tweeted, "unbelievable jobs numbers. these chicago guys will do anything. can't debate so change numbers." the comments caught widespread traction. critics, however, included a fortune manager. posted an article highlighting that ge lost 100,000 jobs under welch's leadership. welch says he can no longer write for the magazine. some companies are using the presidential campaigns as an opportunity for new ad
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campaigns. 7-11 says so far obama takes the lead in its "7 election campaign," where shoppers can choose from a "romney" red cup or an "obama" blue cup. meanwhile, cabbage patch will release a line of dolls that resemble the candidates up for auction on ebay. and, pizza hut is offering free pizza for life to whomever asks the candidates if they prefer sausage or pepperoni at a town hall debate next week. still to come, with the country at a crossroads over labor unions, a new film gives us a closer look at the issues in america's heartland. but first, startups are the key to the u.s. economy, but are they faring well? that's next.
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o' a nationwide effort to help startup companies grow, called "startup america," brought more than a hundred entrepreneurial leaders to chicago this week. as our cover story explains, one of the things a lot of startups have in common these days is their willingness to collaborate. on the 12th floor of chicago's merchandise mart, the people behind 185 digital- and technology-enabled startups have plugged in their laptops and are sharing stories of what works and what doesn't. a wall- sized chalkboard lists workshops in this collaborative workspace
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called "1871," the year chicago had to begin rebuilding itself from the great fire. "in this very large city, there's a density of entrepreneurs here where there's always something going on." it's the kind of environment that incubates what might be the next groupon or grubhub. this week, scott case, one of founders of priceline, hosted a forum on what it takes to launch a startup these days. "when you look at startups, try to network for captial for talent and for customers." one of the attendees, jere mcallister, who created a music media magazine for the ipad called "groovebug," just launched an app with iconic jazz label blue note. "we've partnered with other tech companies and they helped open doors for blue note." mcallister is one of more than a hundred entrepreneurs who see
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america's future in its startups, not necessarily in silicon valley. "we have the capital and supportive environment for these early-stage companies." the startup america partnership was launched last year. it provides startups with access to corporations, investors and services they need to grow. the latest survey of small businesses shows a slight dip in optimism. overall, the index for the national federation of independent businesses dropped 1/10 of a point to 92.8. behind that number, owners planning to create jobs fell 6 points, while entreprenuers who think now is a good time to expand rose 3 points. and those expecting business conditions to improve gained 4 points. still ahead, a new documentary takes a close look at voters in wisconsin, and the issues driving them to the polls. that's next.
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a full-blown power struggle is happening in this country between labor unions and corporate america, along with other anti-union groups. brad lichtenstein spent two years in janesville, wisconsin, where his camera captured the economic crisis in that town after a gm factory shut down. good morning to you. > > good morning, thanks for having me. > > take us behind the scenes. what was it like for those
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people in janesville as they were losing their jobs? > > it was hard. it's still hard, which is kind of the point of the documentary. i think we spend a lot of time talking about gdp and unemployment and other kinds of numbers, but we've sort of lost track that the impact isn't just sudden on people's lives, but it reverberates for a very long time. so in the film, you follow different people: for instance, gayle listenbee, who had to leave her family behind in order to take a job 4 hours away in indiana. that is awful when you have two young daughters in school, and you're missing all that growing up. so, personally it's hard, and also it's just hard to try to manage a family that way. > > what was your take-away from this film? > > i think probably the biggest take-away is that you end up following the story of how a genuine effort to revive the town led by business and political leaders gets derailed by politics, and the polarization that came when gov. walker decided to introduce a bill to end collective bargaining. suddenly wisconsin
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that's really the big take-ons. away, is that political polarization is derailing our economic recovery. > > that was a big moment with gov. walker. what's it like there now? > > in janesville now, it's still a community that is struggling, but they're doing everything they can. there's been some business expansion. in our film we track one story where the town puts together 20% of their budget as an incentive package to bring to janesville a medical isotope company. > > gop vp paul ryan is from janesville. were you surprised to hear him say that the obama administration is to blame for the closure of the factory, when in fact it was already closed, correct? > > it was already closed. there's a technical detail, which is that thousands of people lost their jobs when it closed on december 23rd, 2008. but, there were 57 workers who stayed at the plant to finish out a small truck order for isuzu, and that went into the spring. so, technically, i think paul was trying to use that as part of his convention speech.
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> > where do we go from here? you have been front and center in this situation, and as i mentioned at the top, there is a power struggle. what happens from here? do you have any insights at all? > > i think that we're in the middle of one of the most difficult economic times we've ever seen. the pew research center also tells us that we're in one of the most partisan times in american history, and i personally think that the only way we're going to get past this economic, dismal period that we're still in is if in our communities we can try to come together and get out of our ideological camps and try to work on practical solutions. > > we have been talking this morning to documentary maker brad lichtenstein. "as goes janesville" is the film. you can find it online as well. > > thank you. up next, a check on tech. and will there be another stock similar to apple anytime soon? chart talk is coming up.
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joining us now for chart talk, tim biggam of tradingblock. you say it's time to start checking
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out those tech stocks tim. why is that? > > absolutely angie. tech certainly has been a big outperformer, really ever since qe-1 was announced, that free money policy has certainly given a lot of legs to these growth stocks. but over the past couple of trading sessions or so, we have seen a lot of headwinds in the face of stocks like apple, google, all these big momo names starting to come in pretty sharply here. so, i think given the fact that the imf just lowered their worldwide gdp forecast a couple of days ago, certainly goldman and others lowering the u.s. gdp forecast, this slow kind of almost non-growth environment will probably favor over the short-term some of the old stodgy, dividend, more value- type stock names. > > one of our viewers asked me, "angie, find that next apple. what's going to be the next big thing in tech? what do you think?" > > i think given the fact that we are in this really slow or almost no-growth environment, that next big thing may not be
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as big as apple and some of the other names. innovation always occurs, but as we get further along in the ride, obviously, the upside gets a little bit less, so we can take a look at a stock like facebook and others to perhaps show us that not only does the upside get tougher, a lot of times there's downside involved too. so, trying to find the next apple i think will be tough over the next couple of years. i personally think i'm better served going into what we see working here, mercs and lilies paying a decent yield with some slow steady growth. > > so we need to be boring for a while here? > > boring is good and boring doesn't get hurt if we do have any kind of correction going forward. > > good to have you on the show. that's tim biggam of tradingblock. thanks tim. > > you bet. thank you angie. we are out of time for today. coming up tomorrow, it's movies and money. our critic will be here with a preview of what he thinks will be an oscar contender! from all of us at first business, have a great
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wednesday! we are following breaking news out of union city where firefighters are still on the scene of a huge fire at a strip mall. we will show you exclusive video of the scene and tell you what we have learned. after months of drama ross mirkarimi will keep his job of sheriff. we'll tell you why they voted the way they did. the announcement came two
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hours ago. prestigious award give to a scientist from the bay area. showers by the coast and lightning strikes in the sky here tonight well this morning i should say. all coming up on the ktvu channel 2 morning nows. good morning. thank you for joining us on this wednesday morning, october 10th i'm pam cook. steve paulson is here with the forecast. i saw a couple lights in the sky. lightning steve? >> yes that is correct. also yesterday near half-moon bay some areas did receive the showers. and also up into lake county some of that wrap around. today also along the san mateo coast highs today 60s and 70s here is sal. steve, good morning. right now traffic is doing pretty well. there is a minor crash on eastbound 24 near lafayette not causing any slow down at all. let's move along and take a look at the highway 4 commute

First Business
FOX October 10, 2012 4:00am-4:30am PDT

News/Business. Angie Miles. (2012) New. (CC)

TOPIC FREQUENCY U.s. 9, Alcoa 7, Janesville 6, Us 6, China 6, Chicago 4, America 4, Honda 3, Wisconsin 3, Welch 3, Angie 2, Obama Administration 2, S&p 2, Imf 2, Brad Lichtenstein 2, Gm 2, Amazon 2, Walker 2, Tim Biggam 2, Todd Horwitz 2
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